Monday, 18 October 2010


The Adam Smith Institute has highlighted the potential income from a new privatisation programme in the UK (pdf file).  It claims there is £90 billion in potential income from such a programme.  A figure not to be sniffed at in these chastened times.  It includes on its list the ideas of selling ports and water companies.  It estimates that NI Water is worth £500m (but provides no estimate for the sale of ports here).

Previously, privatisation would have been seen as a non-starter because of Sinn Fein's opposition to the principle.  However, their proposals for the de facto privatisation of the Housing Executive and assets sales may have made this percieved wisdom outdated. Another practical impediment is getting an agreement with Treasury over who receives the receipts for such sales. Plus you have to accept that any sales in the next few years will produce returns on the lower end of the scale and that it will take a couple of years to provide any returns.

The Sinn Fein option of borrowing against sales in the future has been turned down by Treasury before and carries the future risk of what happens if the sale doesn't realise what you expected - how is that hole filled?  There is some suspicion that privatisation/asset sales will be the means of Paterson 'keeping' the capital spend pledge but we should get clarity on that this Wednesday.

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